VAT

There are no announcements set to be made at this Budget. The big speculation is around a change in the VAT rate. So what are the possibilities?

Increase in standard VAT rate to 20%
Many taxpayers would see an increase in VAT as a prudent measure to adopt in trying to reduce the current deficit.

Increase in the reduced VAT rate
Another option for the Chancellor will be to increase the reduced rate of VAT from 5% to somewhere near the EU average of 8%.

Addition of more goods and service into the reduced rate category
Last year agreement was reached between all 27 EU Member States on extending the reduced rate of VAT to a number of additional goods and services.